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Pro-rata on After Tax Mega Backdoor?

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  • Pro-rata on After Tax Mega Backdoor?

    Did a little research but still not clear.

    My 401k (with Fidelity) allows for pre-tax and/or Roth 401k contributions to total 18,500 for the year (normal).

    Employer also contributes a certain amount.

    There is an additional option to contribute AFTER TAX contributions to the account to same max, can't remember the exact value but for simplicity lets say 15,000.

    Our plan allows to move the after tax portion of the 401k to a separate individual Roth IRA account.

    For the sake of the argument, let's pretend I have contributed the maximum 15,000 after-tax this year, and because of the market, have NOT made any gains on it.  Thus, I am converting slightly less (-$500 in market loss) to my Roth IRA.  There are no taxes to pay with the conversion because there are no gains.

    Big question I have is whether the money that I am converting ($14,500) to my Roth will be subject to Pro-rata rule?

    I have a large Rollover IRA from old employer that I need to move to my employer plan but I don't think I'll have enough time to do it prior to the year end, which is why I ask.

    Thanks for any help.

     

  • #2
    what you are doing is not a conversion. This would be a direct rollover from after tax 401k subaccount to Roth IRA. Not subject to pro rata taxation

    Comment


    • #3
      It's not coming from an IRA, so it's a moot point.

      Comment


      • #4


        I have a large Rollover IRA from old employer that I need to move to my employer plan but I don’t think I’ll have enough time to do it prior to the year end, which is why I ask.
        Click to expand...


        FWIW, I rolled an IRA from Vanguard into Fido and as I recall the process start-to-finish took a week.  Once you get the check from your IRA, you can just take a picture and upload it using their mobile app.

        Comment


        • #5





          I have a large Rollover IRA from old employer that I need to move to my employer plan but I don’t think I’ll have enough time to do it prior to the year end, which is why I ask. 
          Click to expand…


          FWIW, I rolled an IRA from Vanguard into Fido and as I recall the process start-to-finish took a week.  Once you get the check from your IRA, you can just take a picture and upload it using their mobile app.
          Click to expand...


          Was this IRA to IRA, or IRA to 401k?

          Comment


          • #6








            I have a large Rollover IRA from old employer that I need to move to my employer plan but I don’t think I’ll have enough time to do it prior to the year end, which is why I ask. 
            Click to expand…


            FWIW, I rolled an IRA from Vanguard into Fido and as I recall the process start-to-finish took a week.  Once you get the check from your IRA, you can just take a picture and upload it using their mobile app.
            Click to expand…


            Was this IRA to IRA, or IRA to 401k?
            Click to expand...


            Vanguard TIRA to Fido 401k

            Comment


            • #7











              I have a large Rollover IRA from old employer that I need to move to my employer plan but I don’t think I’ll have enough time to do it prior to the year end, which is why I ask. 
              Click to expand…


              FWIW, I rolled an IRA from Vanguard into Fido and as I recall the process start-to-finish took a week.  Once you get the check from your IRA, you can just take a picture and upload it using their mobile app.
              Click to expand…


              Was this IRA to IRA, or IRA to 401k?
              Click to expand…


              Vanguard TIRA to Fido 401k
              Click to expand...


              Impressed that Fidelity’s platform works that well.

              Comment

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